Judge Christopher Sontchi of U.S. Bankruptcy Court in Wilmington, Delaware, ruled Wednesday, October 7, that Visteon could pay 83 management employees up to $3.3 million for reducing employment costs and hitting targets for winning new business.

Visteon will not pay most of those bonuses until it emerges from bankruptcy.

But Sontchi said a plan to pay 12 board-elected officers up to $8.1 million if Visteon hit earnings targets or emerged from bankruptcy violated a law that says insiders may not receive bonuses to keep them at bankrupt companies. In overturning that part of the plan, Sontchi sided with objections from unions and the U.S. trustee handling Visteon’s case.

That version had 100 key employees that stood to receive up to $30.1 million in bonuses if Visteon hit earnings targets or exited bankruptcy. It had also involved paying up to an additional $50 million to employees to reward them as part of pre-bankruptcy bonus programs.

The new incentive plan had the support of Visteon’s lenders and unsecured creditors, according to court documents.

Visteon spokesman Jim Fisher said the company “will consider the judge’s ruling and assess our next steps.”

The Associated Press first reported the judge’s decision.

The proposed bonuses for the 12 executives were tied to Visteon’s earning $112.6 million before interest, taxes, depreciation and amortization in the second half of this year, along with its emerging from bankruptcy, Visteon said in court documents. The earnings target is 28 times more than Visteon made in the second half of 2008, the court documents said.

Visteon had said it intended the bonuses to keep executives focused on getting Visteon out of Chapter 11. The supplier had said it did not view the program as illegal because the company would not pay any bonuses if it did not hit the earnings targets or emerge from bankruptcy.

“Thus, there are no retentive features,” Visteon said in court documents.

The proposed bonuses would have ranged from half to 125 percent of the executives’ base salary, Visteon said.